Deutsche Bank Slashes Noble Price Target By 44%

Noble (NYSE: NE) was downgraded from Buy to Hold and had its price target cut from $50 to $28. The price target implies 10 percent downside from Friday’s close, but 4.2 percent upside from the current price (lower on downgrade).

“While we do not think the market is giving the company full credit for its fleet transformation, it will be difficult for NE to escape the overall downward pull of what we see as deteriorating offshore drilling fundamentals,” commented analyst Mike Urban.

Related Link: Drillers Smashed On Deutsche Bank Sector-Wide Downgrades

It is not just Noble that Deutsche Bank is bearish on. The research house sees 13 percent downside for the drilling industry as a whole, commenting, “We strongly disagree and believe the market is mistaking a wholesale recapitalization of the offshore rig fleet for a more benign cyclical downturn.”

The $28 price target is based on a DCF, using a 7.2 percent cost of capital.

Shares of Noble were last trading 0.54 percent lower to $26.62.